Logica defies the gloom

By Dominic White

12:00AM BST 06 Sep 2001

LOGICA, Britain's biggest computer services company, defied the gloom surrounding the sector yesterday by posting a 39pc jump in full-year pre-tax profits to £132m on turnover that broke the £1 billion barrier for the first time.

Martin Read, chief executive, admitted that the figures - which showed a 60pc jump in profits before tax, goodwill and exceptional items to £156m on turnover that rose a third to £1.13 billion - would be difficult to repeat.

"If we are having this conversation in a year's time and Logica is reporting 60pc profits growth again I would be surprised, because it's a tougher market out there," he said.

Mr Read said that growth in the mobile networks business is set to slow and that the telecoms solutions business had been hit by a "severe slowdown" in the US.

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However, he added that Logica was not seeing significant cancellations or deferrals of projects in its key markets and added that it had not made significant job losses.

Sales in the energy and utilities business grew by 54pc to £230m, and the acquisition of Germany's PDV boosted turnover in the "industry, distribution and transport", and finance divisions. However, organic growth was held back by the economic slowdown.

Mr Read said Logica was planning more bolt-on acquisitions and was keen to expand into other parts of Europe including Spain. "We have bought 16 companies in the last five years and we continue to look for opportunities where we are not being asked to pay a silly price," he said.

He added that Logica had tackled problems in its French operations, which reported disappointing figures. "Frankly, we have been doing a bit of a clear-out of what was a rather weak managament," he said. "I think we have turned it around."

Earnings per share rose 22pc to 20.8p and the final dividend of 3.1p, payable on November 9, is up 31pc, making a total for the year of 5p. The shares fell fell 19 to 738p.